020 7898 0500It looks as if we could see a hung parliament from the Italian election 2018. The centre-left Democratic Party slumped to around 19% of the vote and more than 50% of Italian voters showed support for populist parties. There are a range of potential coalitions at the moment and we could see some euro volatility in the days ahead as a result.
Meanwhile, on Friday there was some highly surprising news, as German retail sales unexpectedly declined by 0.7% month-on-month in January, when a 0.9% rise had been expected. Year-on-year, sales increased by 2.3% which was quite a way below the 3.5% analysts had predicted. Still, the euro gained against the dollar and sterling as political events in the UK and US took centre stage.
Today we will see a raft of PMI data from Germany and the eurozone, with the services and composite readings. All are expected to have dipped a little in February so it will be interesting to see if this proves to be the case, especially given the fact that some recent releases from the eurozone have come in below forecast.
We will also see eurozone retail sales for January, but the big release of the week is the third estimate of the GDP growth rate for the fourth quarter of 2018. The figures are expected to be revised downwards; month-on-month from 0.7% to 0.6% and year-on-year from 2.8% to 2.7%.
